"Section 450. Requisites for Creation.

(a)A municipality or a cluster of barangays may be converted into a component city if it has a
locally generated average annual income, as certified by the Department of Finance, of at
least One hundred million pesos (P100,000,000) for the last two (2) consecutive years based
on 2000 constant prices, and if it has either of the following requisites:

(i)a contiguous territory of at least one hundred (100) square kilometers, as certified
by the Land Management Bureau; or

(ii)a population of not less than one hundred fifty thousand (150,000) inhabitants, as
certified by the National Statistics Office.

The creation thereof shall not reduce the land area, population and income of the
original unit or units at the time of said creation to less than the minimum
requirements prescribed herein.

(b)The territorial jurisdiction of a newly-created city shall be properly identified by metes and
bounds. The requirement on land area shall not apply where the city proposed to be created
is composed of one (1) or more islands. The territory need not be contiguous if it comprises
two (2) or more islands.

(c)The average annual income shall include the income accruing to the general fund,
exclusive of special funds, transfers, and non-recurring income."

SECTION 1. Section 452 of RA 7160 is hereby amended and shall read as follows:

Section 452 Highly Urbanized Cities. (a) Cities with a minimum population of two
hundred thousand (200,000) inhabitants, as certified by the National Statistics Office, and with the
latest LOCALLY GENERATED annual income of at least (Fifty Million Pesos
(P50,000,000.00)) TWO HUNDRED FIFTY MILLION PESOS (P250,000,000.00) based on
(1991) 1998 constant prices, as certified by the (city treasurer) DEPARTMENT OF FINANCE, AND
AN AVERAGE REAL PROPERTY TAX COLLECTION EFFICIENCY OF, AT LEAST, EIGHTY
PERCENT (80%) FOR THE THREE YEARS PRECEDING THE CURRENT CALENDAR YEAR,
shall be classified as highly urbanized cities.

(b) x x x

(c) x x x

SECTION 2. Section 461 of RA 7160 is hereby amended and shall read as follows:

Section 461. Requisites for Creation. (a) A province may be created if it has(an) A
LOCALLY GENERATED average annual income, as certified by the Department of Finance, of
not less than (twenty million pesos (P20,000,000.00)) TWO HUNDRED MILLION
PESOS (P200,000,000.00) based on (1991) 1998 constant prices; AN AVERAGE REAL
PROPERTY TAX COLLECTION EFFICIENCY, OF AT LEAST, EIGHTY PERCENT (80%)
DURING THE THREE YEARS PRECEDING THE CURRENT CALENDAR YEAR, and it has the
following requisites:
 (i) contiguous territory of at least two thousand (2,000) square kilometers, as certified by
the Lands Management Bureau; or (ii) population of not less than two hundred fifty thousand
(250,000) inhabitants as certified by the National (Census and) Statistics Office.

Provided, That, the creation thereof shall not reduce the land area, population, and income
of the original unit or units at the time of said creation to less than the minimum requirements
prescribed herein